Strategy Seminar

Wednesday January 15, 2014

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Solution Diversity and Social Entrepreneurship: Founding of Collective-Goods Organizations after Natural Disasters in California, 1991-2010

Why do some communities have higher rates of social entrepreneurship? On the one hand, the literature in social entrepreneurship engages the question from a behavioral and attitudinal standpoint. On the other hand, the literature in civil society posits entrepreneurial civic behavior as a consequence of engagement fostered through dense ties such as in the presence of voluntary associations. Yet, neither sentiment nor social closure can fully account for the process of entrepreneurship that creatively aims to solve the community's collective-goods problems. I ask: If we exogenously imposed a need for collective goods over and above the level endogenous to a community, what kinds of communities would be better at emerging with entrepreneurial responses? I suggest that the community's latent capacity to organize in response to exigencies rests on its richness of voluntary organizing models, such as in the variety (not density) of voluntary associations in the community. Greater associational diversity provides a richer repertoire of civic organizing solutions; such communities are more likely to respond to emergent collective-goods problems with social entrepreneurship, especially when these problems are novel or complex. In a panel study of social entrepreneurship after natural disasters in California in the period 1991-2010, I find strong evidence for this claim, net of observed demographics, political conditions, and unobserved fixed characteristics of location and time.